• In The Trenches

    Pandemic Exposes Flaws in Health Care Payment System

    I ask myself, "Is it a sin to be flexible when the boat comes in?"
    -- Depeche Mode

    Close up of businessman or accountant hand holding pen working on calculator to calculate business data, accountancy document and laptop computer at office, business concept

    Last week signaled a "reopening" of many businesses across the country. Nail salons, gyms and restaurants have slowly begun to open their doors -- some with modified reservation systems, seating and safety measures. Many physician practices have, as well. Patients who deferred care during the pandemic have begun to schedule in-person appointments. As a result, physicians are grappling with new workflows and safety protocols to protect their patients, staff and themselves from unnecessary exposure. It is a new normal for everyone.

    The pandemic has exacerbated the many challenges that the legacy fee-for-service system presents to primary care. When patient volume disappeared, so did much of the staff formerly charged with helping manage the many needs of practices' chronically ill patients. Practices unable to absorb the immediate financial losses were forced to temporarily or permanently close their doors. Family medicine, a specialty focused on keeping people well, suffered significant financial losses.

    During the past decade, there have been moves to shift the health care system, including primary care, to more agile payment models. Although these efforts have met with varying degrees of success, they have failed in similar places. Many of the models were only accessible to larger practices with the data analytics and technology to support them. Their appetite and ability to take on more financial risk was substantially beyond that of smaller practices. Many viewed the new models as unattractive because of excessive documentation or other requirements. To its credit, CMS has thrown many strands of pasta against the wall to see what sticks.

    Last week, the Medicare Payment Advisory Commission issued a report to Congress. In it, the commission indicated that it intends to accelerate its recommendations on how to reform the payment system. This is encouraging news. However, if CMS is to achieve the holy grail of the quadruple aim -- cost, quality, patient experience and physician experience -- it is imperative that it evolves its thinking in several meaningful ways.


    The pandemic had an immediate impact on practice workflows due to staff reductions, limited personal protective equipment and the need to reduce the risk of COVID exposure for clinicians and patients. However, patients who were unable to see their physician in person still needed care. We were encouraged by the quick uptake of telemedicine to fill that gap so patients could still connect with their physicians. What the pandemic has illustrated is the need for practices to be agile in responding to their patients' needs, and I believe this accelerated move to telemedicine will ultimately enhance the longitudinal patient-physician relationship.

    It will be imperative that payment models appropriately account for these types of interactions, and I don't just mean in dollars and cents. These interactions contribute to the quality of care that alternative payment models should not only allow but encourage. When models are designed with an eye toward comprehensive care, the modality by which this is achieved becomes much less important.

    Social Determinants

    We all recognize that health is not achieved only within the four walls of a physician's office or hospital. Many factors contribute to overall health. Access to adequate food, shelter and transportation have an outsized impact on one's ability to lead a healthy life.

    As physicians are increasingly being asked to take responsibility for the total cost of care, there must be support and resources to address social determinants of health. Physicians are connecting their patients with resources in their communities, and payment models must appropriately recognize the critical role that those services play in the health and well-being of patients.

    Primary Care Investment

    There have been robust discussions for and against moving away from a fee-for-service system. Some think that getting paid for the services provided is right and appropriate, while others think that being paid in a prospective manner allows for better planning, resource allocation and population health management. No matter your stance, both constructs rely heavily on the proper valuation of services. As long as we are tied to a system that values services in terms of units of time or cost, neither arrangement will thrive. The value of those codes is the underpinning of nearly every payment system. Whether it be FFS, prospective payments, a hybrid capitation model or even a direct primary care arrangement, an assumption of the relative value of services must be made to adequately project spending and savings. It is widely recognized that there has been a historic underinvestment in primary care.

    Although we could spend hours debating the merits of one payment system over the other, we can all agree that the federal government and other payers cannot arbitrarily hold down those values in an effort to save money without a serious impact to patient care.

    Measure Alignment

    One of the biggest impediments to success and meaningful uptake of payment models is the alignment of measures. One payer has one definition of quality, and another has a different definition. Most would argue that there are no marked differences in quality and outcomes across payers to show for this senseless variation. Not only are the measures different, but so too are the risk adjustment methodologies and reporting mechanisms. Put all of this together and what you get is a paralyzing set of measures and reporting processes that do not at all correlate to health outcomes and actually amount to waste (not to mention the increasing frustration of physicians and patients being suffocated by clicks with little to show for it).

    Current measures of primary care are scattered across all diseases, conditions and preventive needs of patients. Measures should focus on the unique and meaningful features of primary care, such as access and first contact, comprehensiveness, coordination, patient and caregiver engagement, continuity, and care management. It is understandable that those paying in would like to ensure that their money is put to good use, but alignment on how this is best demonstrated would go a long way to ensure that physicians are committed to delivering the highest quality care at the best overall cost.

    Medicare spending is anticipated to grow from 3.6% of gross domestic product in 2018 to a projected 4.7% of GDP in 2027. This sharp increase means that CMS will be looking for ways to hold down costs. Left to its own devices, the agency could do so in overly draconian and burdensome ways. We will be working to create supportive environments to pilot all different types of models and to ensure that they are accessible to all physicians -- irrespective of practice size or payer mix. There will not be a single solution that will suit all members, but we need to be united in our calls for the proper valuation of primary care.

    Stephanie Quinn is senior vice president of advocacy, practice advancement and policy.


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